This is a very simple method of job evaluation. Under this system the job raters simply rank one job against another without assigning point values. Jobs within the organisation are arranged in an order either from the most difficult to the simplest or in the reversed order. It does not measure the values of jobs but only establishes their ranks.

When this method is employed, the job rater simply compares two jobs, one against another and asks which of the two is more difficult. Once that question has been settled, another job is compared against the first two and a similar determination is made. This process is repeated until all jobs from the job of the greatest difficulty down to the job with least difficulty have been assigned relative positions.

Job-ranking is preceded by systematic job analysis and job description. Sometimes job titles and brief job descriptions are recorded on cards and the raters are asked to arrange the cards in the order of importance. The hourly rates to be paid for different jobs are suggested by raters without any consideration to the existing wage rates.

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The ranking systems of job evaluation are generally used in small organisations where all jobs are well-known to job raters. The simplicity of this system is its greatest asset. Little preparation as well as little investment is required.

The simplicity of the system is also its greatest weakness. The system does little to guide the judgement of the raters. Without a formal yardstick, there is a tendency to judge each job on the basis of its dominant factor. The ranking system is extremely difficult to explain to the employees because there is no objective norm to guide the judgment of evaluators.

Lastly, the ranking system can only tell us that one job is more difficult than another without indicating how much difficult it is.

(2)Job classification system

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The job classification system is one of the oldest methods of evaluating jobs and emphasises allocation of jobs to classes. Job classification system begins with an overall comparison of all jobs, on the basis of common sense and experience. The job structure is divided into a number of classes.

Each class is assigned a salary range with maximum and minimum limits. After that the actual jobs are fitted into these predetermined classes. Thus, according to this system, the menials may be put into one class, clerks in another, supervisors in a higher class and higher executives on the top class.

This system is best suited to small organisations. This is also used in government services. But this is not suitable for large organisation with complicated class specifications.

(3)Points rating system

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This is a widely used system in modern business. It is based on the assumption that it is possible to assign points to the different factors as well as to each degree of each factor involved in jobs and that the sum-total of the points will give an index of the relative value of jobs.

The first step is to decide the factors or elements which cover all the jobs such as skill, effort, responsibility, working conditions etc and each factor is given a maximum points value.

The degree of each factor is determined and these degrees determine the number of points to be assigned to the job. The total of the points assigned for all factors establishes the point value of the job and its value is translated into terms of money on a predetermined formula.

Some firms are using values and points developed from their own experience while others use the system developed by industry-wide organisations.

The points rating system has many advantages over ranking and classification systems. The use of fixed and predetermined factors forces the evaluator to consider the same job elements when rating the jobs. The systems have the advantage of forcing job raters to consider individual factors rather than the job as a whole.

Moreover, the assignment of point values indicates not only which job is worth more than the other but also how much more it is worth. Finally, a clear record of the judgements of the evaluator is later available for explaining the results of the evaluation to superiors and employees alike.

Though this system is commonly used in industry in the UK, it has its limitations. The listing of factors may omit some elements that are important in certain jobs. It is obvious that arbitrary weights are attached to various degree and to the factors by specifying maximum and minimum points. The same points systems cannot generally be used for production and office jobs. Lastly, this system is inflexible.

(4) Factor comparison system

This system is similar to the point rating system and is widely used in business. This method begins by finding out the major factors which are present in more or less degree in all the jobs in a particular organisation. Usually the most common factors are mental effort, skill, physical effort, responsibility and working conditions.

These are not predetermined but are chosen on the basis of job analysis. The second step is to select a number of key jobs, ten or twenty, which can be used for comparing all other jobs. For example, key jobs may be fitter, machine operator, watchman, driver etc. The money rates of each of these key jobs are already known.

This means that the accuracy of the evaluation methods depends to a large extent on whether the key jobs selected for comparison are themselves properly paid or not. In the third step, each of the key job’s current rates of pay is analysed to suggest what per cent of the total rate is attributable to each job element.

Thus, it may be found that if a fitter is paid Rs. 10 per day, the first element may be assigned a value of 10%, the second 20%, the third 40% the fourth 10% and the fifth 20%. When all key job rates have been thus analysed, averages of the percentages thus obtained are accepted as weights for the elements.

At the final stage all other jobs are appraised and assigned a value on each factor by comparing them with key jobs. Thus, for each job to be evaluated a particular key job is found to which it is very similar.

Under this system it is the task of the evaluators to analyse all jobs and then to rank them in terms of one factor. If, for instance, the factor being considered is technical skill, the evaluators will first rank all jobs in this respect, from those which require the most, down to those which require the least technical skill.

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After this step is completed, evaluators will then rank all jobs in relation to a second factor and so forth until separate rankings have been established for each of the factors involved. As point values have already been assigned, it is only necessary to total the point values in order to get the overall relative worth of that job.

The system has two distinct advantages. First, it uses the job-by-job comparison technique which is a far more accurate method of measurement. Secondly, advantage is derived from the fact that the weights selected are not entirely arbitrary but reflects existing wage and salary practice. The disadvantages of the system are that it is very expensive, complicated and cannot be readily explained to the workers.

When job evaluation is completed, the relative difficulty of jobs within the company is determined in terms of point rankings. Thereafter it is easy to assign money value to these jobs in some direct proportion to the points assigned under evaluation.